Bank Rossii: Mixed Policy Decision

June 10, 2013

Russian monetary officials left the main refinancing rate unchanged at 8.25% but cut some longer-term rates such as the one-year repo, which becomes 7.25%, down from 7.5%. A released statement explained that “he cut in the interest rates on longer-term liquidity provision operations brings the cost of obtaining liquidity from the Bank of Russia by credit institutions closer to the interest rates on the Bank of Russia main liquidity provision operations, which will contribute to strengthening the interest rate channel of the monetary policy transmission mechanism.” Although above target now, officials believe that the current policy stance will deliver in-target inflation sometime in the second half of this year unless there is a fresh food shock. Growth is “low.”

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